Mt. Pleasant moves with plan for apartments on Parcel B

Photo by MINDY NORTON/Morning Sun - The City of Mt. Pleasant may have found a buyer for the vacant land next to City Hall on Broadway Street in Mt. Pleasant. Michigan Community Capital of Lansing is proposing an apartment building with a commercial tenant on the first floor.

Mt. Pleasant’s economic development board Wednesday took the first step toward approving an apartment project for downtown Mt. Pleasant.

The city’s Economic Development Corporation heard a presentation from Eric Hanna, president of Michigan Community Capital of Lansing, on the company’s proposal to buy the vacant land at 410 W. Broadway – Parcel B – next to Mt. Pleasant City Hall and build a 36-unit apartment building with first floor space for a commercial tenant.

At this time, Michigan Community Capital (MCC) is talking with GreenTree Cooperative Grocery as the possible tenant for the project. GreenTree, currently on Franklin Street in Mt. Pleasant, has been looking to expand.

After the presentation, the EDC voted unanimously to authorize city staff to begin working on a development and purchase agreement with MCC for the property. Such an agreement would have to be approved by the EDC and then by the City Commission.

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“We are trying to create a high-visibility, well-designed product that will act as a transformational product for the community,” Hanna said. “We do this work in a lot of smaller communities…. The plan is to come in and do a single project and hope that has some catalytic offshoot effects.”

A big question was whether the developers would want tax incentives, and Hanna addressed that issue.

He said they would request a tax abatement of 10 years for the commercial portion of the property. The taxes for those 10 years would be based on whatever the value of the property was at the start of the project.

They would want a 15-year tax abatement for the residential portion of the building.

The company would pay the city $360,000 for the land. The EDC currently owns the property.

“What I’m hoping is that sort of softens the impact of the necessary tax abatements,” Hanna said. “We would need the abatements to show the bank that the operating expenses and the debt service will work to get that part of it financed.”

Hanna said after the meeting that he does not think they would need a Brownfield agreement.

He told the board that MCC plans to make this a long-term investment in the community.

Having a grocery store as the commercial tenant would bring some challenges and would increase the cost of the project, he said.

“We don’t know the full costs of the buildout for the grocery section of the building,” he said, adding that MCC doesn’t usually do groceries as its commercial tenants.

He estimated having a grocery store as part of the project would push the total cost to $9 million to $10 million.

“It’s a lot simpler to build a 6,500-square-foot white box for a restaurant than it is to build a 10,000-square-foot grocery store. It’s a lot more square footage, a lot more power. The layout has to be particular, because you have traffic patterns you have to consider. And a lot of grocery stores have restaurant-style stuff in them. They have ovens, they have chillers, they have loading docks.”

City Manager Nancy Ridley asked Hanna if he thought he would be able to find another commercial tenant if the GreenTree scenario fell through.

“If that fell through, I think we would be able to find another tenant. I really do. I think the site is special enough we could do that,” he replied.

Parking was another issue discussed.

Hanna said he expected that they would provide parking for the apartment tenants, but the grocery store customers would need someplace to park. For that, he would be interested in an agreement to use spaces at nearby City Hall or in the public parking lot across the street.

“I really don’t like to put tons and tons of parking on those sites,” he said. “We have restaurant tenants, if you have to walk a block in the snow, that’s what you have to do. In this case, if you are going to be carrying groceries, or rolling a grocery cart, we are sensitive to that from a parking arrangement perspective. We need to work the details out, but we definitely want to have good access to the ground floor. We want that business to thrive.”

He said they have a prototype for the buildings when they do a project.

“We’ve done several years’ worth of research to help us understand the best way to build a building. The buildings are all masonry. There is light-gauge steel behind it, because we don’t like wood, because wood will shift over time behind the masonry. We tend to use concrete for flooring. We use moderate grade finishes, Corian countertops,” Hanna said.

“Our buildings are approximately 20 percent more expensive than normal frame construction. We do that because as a nonprofit investor, we are going to be maintaining these buildings for 30 to 50 years. My (successor) will not be happy with me if these buildings have lots of maintenance issues. We approach a building as a long-term investment.”

MCC has other projects underway, including ones in Cadillac, Grayling and Ludington and one at the corner of Benson and Michigan Streets in Grand Rapids.

In preliminary information provided to the city this spring, MCC indicated the apartments would be two-bedroom premium, two-bedroom standard, one-bedroom and studio. Rent was estimated at $718 to $1,200 per month. They would not be marketed toward college students.

Hanna said he does not think a large 100-unit apartment project would work for the community, but he feels more comfortable with this smaller proposal.

In addition, he discussed other features of the property.

“I want to create some areas for tables and chairs. Possibly in the months where it’s not snowing, space for additional sales space, fresh produce and stuff like that. I’m really careful to set the building up on the site so there’s useful space around the building,” he said.

He said there will be a property/leasing manager on site and maintenance on site.

The next step for the local project will be the development agreement. Assuming that is approved, Hanna said he would expect to have the groundbreaking in the spring of 2019 with construction taking about 14 to 16 months.